Bitcoin Surges Amid Reflationary Environment, Fed Rate Hike Decision Looms

The US debt has surpassed $4 trillion, and Bitcoin has risen by 22% since July 24. Gold is also up 9.4%, and this surge in hard assets has some experts predicting a Q4 rally.

The Federal Reserve's policy meeting on September 16 will be a critical test for determining the market trend in the fourth quarter. The probability of a rate hike priced by the market is about 60%, but this is still lower than the historical level when the Fed usually takes action, which is above 80%.

If the Federal Reserve chooses to keep rates unchanged and inflation does not further exceed expectations, the policy window could be extended at least until the next meeting on December 9. This would give risk assets room to move higher in the short term.